The stock market’s rebound from its worst decline in four years picked up steam Wednesday. The Dow jumped 145 points on the hopes The Fed has restored order to the credit market and dealmaking can continue unbridled. Can it?
THE RETURN OF THE DEAL?
The headline: Online Brokers E*Trade (ETFC), TD Ameritrade (AMTD) In "Serious" Merger Talks: WSJ; Also NYMEX (NMX) Surges After Disclosing Preliminary Takeover Talks;
Guy Adami feels confident that the E*Trade and TD Ameritrade deal will “get done.”
Pete Najarian feels that Ameritrade CEO Joe Moglia will have to decide if E*Trades exposure to mortgage is toxic or not. That’s the key to the deal, suggests Najarian
Stacey Briere Gilbert does not think this deal gets done.
Dylan Ratigan asks if the airlines might be the next sector to see consolidation?
Stacey Briere Gilbert speculates that Delta Airlines (DAL) might soon be involved in a deal. However, she cautions that she doesn’t like the airline sector.
Jeff Macke doesn’t think deal making is coming back anytime soon.
M&A Activity Since January
January 2007 $137 B
February 2007 $173 B
March 2007 $101 B
April 2007 $189 B
May 2007 $237 B
June 2007 $141 B
July 2007 $205 B
Aug 2007 (to date) $33.6 B
A BULL MARKET'S BEST FRIENDS: BHP
The headline: Alcoa (AA), Commodity Stocks Make Strong Comeback Today; BHP Jumps On 28% Profit Spike,
In the materials space, Guy Adami says he loves Freeport-McMoRan (FCX) which he thinks is poised to go higher. Guy is positive on the demand for materials worldwide.
Stacey Briere Gilbert also believes there’s still strong global demand.
Pete Najarian said the Materials SPDR (XLB) led the market higher. He feels the entire sector is ready to move higher.
SPECIALTY RETAIL AFTER HOURS
The headline: Abercrombie & Fitch (ANF),Zumiez (ZUMZ), Gymboree (GYMB) Fall After Hours
Jeff Macke believes a lot of bad news is already priced into these names and he exclaims, “The consumer is not dead!”
APPLE OF THE MARKET'S EYE
The headline: Apple (AAPL) Resumes Incredible Run With 6% Jump In Past 5 Days
Pete Najarian doesn’t feel the jump stems from the iPhone, but rather all the other products as well as deals Apple has in the pipeline.
Guy Adami tells the panel he expects some downside in AAPL.
The headline: Chinese Online Gaming Company NetEase.com (NTES) Soars
Stacey Briere Gilbert explains Susquehanna Financial upgraded NetEase.com, citing popularity of its "Westward Journey" video game. Also she says Susquehanna likes its on-line ad growth.
The headline: Najarian Seeing Unusual Options Activity In Drug Makers Merck (MRK), Schering-Plough (SGP)
Pete Najarian says the options call buying suggests to him these stocks could go higher.
The headline: Lehman Brothers (LEH) Becomes 1st Wall Street Firm To Close Down Subprime Unit
Jeff Macke says the perception on The Street is that The Fed will protect the financials.
On a related note, Stacy Briere Gilbert adds it’s positive to see that IndyMac is making jumbo loans again.
The headline: The Trade As Hillary Clinton Sees Chances Of Winning Increase
Dylan Ratigan explains that Tradesports.com shows Hillary Clinton with 40% probability of winning
Stacy Briere Gilbert says having a Democrat in the White House will be positive for generic drug makers, alternative fuels, and “natty-gas.” Stacy recommends taking a look at all these sectors if the trend continues.
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Trader disclosure: On Aug 22 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money; Najarian Owns (BMY), Najarian Owns S&P Puts: Stacey Briere Gilbert Is Chief Options Strategist For Susquehanna Financial Group, LLLP: Gilbert Is Head Of Market Intelligence Research For Susquehanna Financial Group, LLLP: Gilbert Does Not Cover Individual Securities But Does Recommend Trading Strategies; Gilbert Has A Long Position In (HOT); Susquehanna Financial Group Is A Market Maker In (AMTD), (AAPL), (BCSI), (ETFC), (FWLT), (GYMB), (IRBT), (JBLU), (NTES), (NTAP), (UAUA), (WYNN) (ZUMZ), (CTSH) Susquehanna Financial Group And/Or Affiliates Together Own More Than 1% Of (BCSI), (BSC), (CAL), (LCC), (NMX), (NYX), (NTES), (UAUA), (IMB), (GT); Susquehanna Financial Group And/Or Affiliates Together Owned More Than 1% Of (FCX) On 8/20/07